To ask the Chancellor of the Exchequer what rate of interest is charged on loans and guarantees made from the Exchequer to financial institutions in public ownership.
Details of the loans and guarantees provided by HM Treasury for financial stability purposes to financial institutions partly and wholly owned by the Treasury are set out in the Treasury's Resource Accounts for 2008-09 (HC611) and for 2009-10 (HC261).
The interest rate on HM Treasury's loan to Northern Rock (Asset Management) plc (NRAM) is currently charged at Bank Base Rate plus 25 basis points. The outstanding loan as at
NRAM has also been provided with a working capital facility of up to £2.5 billion by HM Treasury which is currently undrawn. Any drawdown on this is subject to a one off utilisation fee of 50 basis points on the amount drawn. NRAM pays HM Treasury a monthly fee of £1 million for HM Treasury's guarantee of its wholesale liabilities.
HMT has removed its retail and wholesale guarantees in place for Northern Rock plc, with the exception of certain fixed term retail and wholesale balances which are guaranteed to maturity. Northern Rock plc pays a fee of 50 basis points on guaranteed retail deposit balances, and a fee of 200 basis points on guaranteed wholesale balances.
The interest rate on the working capital facility provided by HM Treasury to Bradford and Bingley plc (B&B) is currently charged at Bank Base Rate plus 150 basis points. As at